Let me 1st explain what a Keogh plan is and why you should have one. As Realtors, we are self employed individuals. Investing while you are young is one of the biggest keys to having a comfortable retirement. The Keogh plan is a no brainer that every Realtor should be taking advantage of.

A Keogh plan is a tax-deferred investment retirement plan for self-employed individuals. All deposit money put into this account grows annually tax-free. The investment income accumulates tax-deferred until capital is withdrawn. Like IRAs, Keogh plans allow you to purchase any number of financial investments.

Unlike individual retirement accounts (IRAs), which limit tax-deductible contributions to $2,000 per year, a Keogh allows you to save as much as 20% of your net self-employment income up to $49,000 per year in 2009, depending on the type of Keogh plan you adopt.

The $49,000 contribution level was raised from $46,000 last year. Investing the maximum allowed is a very smart financial move that will hopefully pay you handsomely down the road.

The Keogh contribution tool by TIAA-CREFF allows you to calculate, based on your Net business profit, how much you are allowed to contribute for the year. I like to use this tool through out the year to be able to calculate how much I will be able to invest by year end.

For example, if I am having a great year and project to make X dollars, I can punch that amount into the calculator and it will give me my contribution limit. I can then plan accordingly and deposit monies into my Keogh account based on the calculations. By investing early, instead of waiting till the end of the year, you hopefully gain additional appreciation.

About the Author: The aboveReal Estate information on the Keogh contribution calculator was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise!